Unemployment rate for residents declined to 4.4% in December 2020.
The Singapore labour market has seen an improvement in Q4 2020 as the unemployment rate for residents declined for the second consecutive month to 4.4% in December 2020, with resident employment reaching pre-COVID-19 levels by the end of the year, according to the latest report from Ministry of Manpower (MOM).
“It’s a strong testament that the unprecedented policy support, particularly the Jobs Support Scheme, had helped to stave off the worst effects from the economic fall-out from the pandemic,” OCBC Bank head of treasury research and strategy Selena Ling said.
Overall unemployment rate has also eased in December 2020 at 3.2%.
Moreover, total employment for the quarter, excluding foreign domestic workers, fell at a slower pace of 13,500, with about 28,900 growth in resident employment and 42,400 contraction in non-resident employment.
Ling noted that whilst the domestic labour market has stabilised slightly in the last two months of 2020, it is not completely out of the woods yet.
“It’s basically a race against time for the vaccination roll-out since there are emerging new virus strains which could destabilise business and consumer confidence and impact hiring intentions and hence the labour market,” she said.
Meanwhile, HSBC economist Yun Liu noted that whilst it is fair to assume that the worst may have passed in the labour market, it will still take time to fully recover to pre-pandemic level.
“The recovery pace also varies by sectors, as some are benefitting from fewer social distancing restrictions, but others are still struggling,” she said.
Liu added that job recovery is likely to be uneven and gradual across sectors, thus requiring additional targeted fiscal support. She also explained that a gradual improvement in the labour market this year is unlikely to translate to swift price pressures.
“Alongside a likely sustained fiscal stimulus in FY2021 and improving inflation expectations, we expect the Monetary Authority of Singapore to keep its monetary policy unchanged in 2021,” she said.
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